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How to manage the demise of the MPIG

GPs have been hit with a double whammy of contract changes from 1 April with the scrapping of the square root formula and the first step in the MPIG phase-out. Dr Gavin Jamie advises on how to cope.

GPs have been hit with a double whammy of contract changes from 1 April with the scrapping of the square root formula and the first step in the MPIG phase-out. Dr Gavin Jamie advises on how to cope.

How it started

Six years ago the BMA sent out details of the likely level of practice income under the new GMS contract and things looked pretty bad. Back then expectations of the QOF were pretty modest and many practices looked like they might become unviable overnight.

The extent of the problems was apparent within a couple of days in a flurry of emails and internet forum postings. The name of Professor Carr-Hill, the inventor of the resource allocations formula, became shorthand for financial instability.

The solution was to make the transitional arrangements permanent. Practices would still get their global sum but a correction factor would be added to top up the total practice income (including only 100 QOF points) to the level of practice income before the change. The correction factor would be a permanent feature for 90% of practices and would rise annually at the same rate as the global sum. That annual rate turned out to be zero for the first four years.

Conceived in haste and reluctantly delivered, the correction factor has proven to be politically unpopular. The explicit aim of the Carr-Hill formula in the first place was to be redistributive. This is still politically the case and the desire is to remove the correction factor.

This effectively takes us back to that day in 2003 when the global sums came out. Last year's pay increase applied only to the global sum, with nothing going into the correction factor – in 2009/10 the percentage uplift to the global sum and the MPIG will be in the ratio 7:2 – but the DDRB has yet to announce the pay award. Carr-Hill ‘winners' have moved away from the correction factor. Over the next few years it is likely that the losers will have this removed too, although quite how this will happen is still up for debate.

Your PCT should send you a printout of your global sum and correction factor every year. Now is the time to read it. It should list all of the various factors that combine to make your global sum. By far the most significant of these are likely to be:

• the age and sex of your patients with younger men attracting by far the lowest payment – something that particularly affects university practices

• list turnover – patients in their first year of registration attract 50% more cash

• more minor factors such as average distance of patients to the practice, population density and a couple of factors based on location

• patients in nursing and residential homes – worth 40% more than other patients of the same age and sex.

The maths is unfortunately virtually impossible to check because the value of a ‘standard' patient also varies with PCTs. There should, however, be some numbers at the bottom showing your global sum and correction factor. Could you survive on the global sum alone?

Although the correction factor will not disappear overnight, a complicated new formula has been unveiled to begin the MPIG phase-out. However, it is unclear whether this deal will continue beyond next financial year. The GPC has now admitted to Pulse the deal will be grossly unfair to some practices because there is no clear national pattern as to why some practices have high correction factors.

What to do if you lose out

There is very little you can do about your global sum. It is difficult to instigate a policy of registering more women to attract more cash. One small area that is worth checking is that all patients in residential or nursing homes are registered as such. There should be a special area on the registration screen of your computer system to do this and it is very important that all members of staff who deal with registrations or change of address are aware of this.

Avoid long-stay temporary residents if you can. There is no longer any separate funding for temporary residents or immediate necessary treatment. Registering short-stay patients with the surgery will attract payment and if they then go back to their initial practice then they will be worth more to them, too, as new patients. Other than these fairly small measures, the other ways of getting some of the cash back involve more work.

The standard advice to increase list size, take on enhanced services or diversify into non-NHS services involves additional work that will not necessarily be attractive to practices. There are certainly fewer opportunities during a downturn. The important thing is to start talking to your PCT now if you think you are in danger of going under with the combined effect of the QOF changes and MPIG phase-out.

When to reduce services

The real question where losses are significant is whether they should be absorbed as a reduction in profits or whether services should be reduced. Practices should be careful not to reduce services that bring in, directly or indirectly, other sources of income. It is not attractive to think about reducing services, and it is certainly not what most of us came into medicine to do.

Where practices have lost income, however, it is the Department of Health and NHS management that have decided, based on the patients at a surgery, that resources should be reduced. If services have been greater than average in the past, the clear implication from management is that services should be reduced towards the average to ensure equity.

Unfortunately for many practices the overall situation is worse than this. Big losers on the global sum will tend to be losers as the disease prevalence adjustments to the QOF come into effect. For 2009/10 the square root formula will go, but the 5% cut-off will remain until the following year. Don't assume that the 5% cut-off does not apply to you.

The calculations to work out the changes for your practice are complicated but thankfully can be delegated to the machines. There is a spreadsheet from the GPC or the details are on my website (

Roughly half of practices will see overall changes of less than the equivalent of 50 points. Just under a fifth, however, will see changes of more than 100 points with half (950) of those as losers. Of course there are roughly the same number of winners as losers and the winners will need to think about supplying additional services or paying for those that were previously under-resourced.

In both cases these are an explicit attempt to direct resources. Reduction in services is inevitable for many practices and all practices must look at their services against resources.

Although the allocation formulas may have flaws, and I believe that these are several and significant, they are the immediate future of general practice and we must ensure that resources given to us are used in a way that is fair to both practices and patients.

Dr Gavin Jamie is a GP in Swindon, Wiltshire, who runs the QOF Database website

How to manage the demise of the MPIG How the MPIG will be phased out

• In October the GPC and NHS Employers signed a contract deal that included changing the formula linking QOF pay to disease prevalence and a differential uplift to kick off the MPIG phase-out.

• The differential uplift would be applied to any 2009 pay award, with the percentage uplifts to the global sum, QOF, enhanced services and correction factor payments in the ratio of 7:5:5:2 respectively.

• The uplift is designed to reduce practices' reliance on correction factor payments.

• The GPC is now concerned the differential uplift could lead to a ‘potentially unfair' distribution of funding, given there does not appear to be a clear national pattern for why some practices have large correction factors (‘Can the GPC avert a contract crisis?', PCTs have just completed a survey of 500 practices with the largest correction factors to understand this better.

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